Sorry, no article to link to. I just wanted to get people's opinion on what they think the effects of reduced oil consumption (or perhaps stop it altogether) would have on our economy, and probably our way of life as well. I'm not saying that every last drop of oil on the planet has been consumed, simply that the cost per barrel has become so high that it is no longer economically feasible to rely upon it anymore. What sorts of effects do you think this will have on the US? What kind of things can we do to lessen the blow, and can we realistically expect these measures to be met before we "run out" of oil?

Personally, I'm guessing that no matter what we do there's going to be a shift from personal, private long-range transportation (ie cars) to more public transportation. Maybe trains will become popular again, at least for long distances, such as going from one city to another. But within the cities there might also be monorails and subways, though I'm guessing people will simply have to walk more and/or ride bicycles. I could very well be wrong and cars will still be here, but if that's going to happen they'll necessarily have to be electric. I'm not holding my breath for hydrogen fuel cells to take off, and gas-electric hybrids only work if you can afford the gas.

But with so much of our economy dependent upon gasoline, I'm guessing that there's going to be a lot of economic collapse. The food you buy, for instance. If grocery stores can no longer afford to pay for shipping and distribution, they aren't going to have anything to sell to you. And maybe the guy in the Mid-West who grows much of the grain that goes into making your bread can no longer afford to pay to ship his product. So I'm guessing that super markets are going to go down the shitter real fast. Farmer's markets might take off, but again it depends upon how efficiently they can get their produce there in the first place. I guess food production will become more local? Maybe most households will establish their own back-yard gardens, not necessarily to provide their entire diet but to at least supplement it. Or perhaps an entire neighborhood will band together to make one collective garden.

But gas isn't the only product that we get from fossil fuels. Much of our plastic products are also formed from oil. What do you think we'll see? Massive recycling campaigns for plastic, or maybe we'll just gradually use less and less plastic? But won't that have some negative effects as well? Plastics help keep produce fresh for longer, and provide a barrier against infection and contamination in hospitals. If plastics suddenly no longer become an option, how are hospitals and the like going to handle this?

What are some other effects you guys see happening, and what does it mean for Joe Q Average?

5/3/2007 4:18:29 PM

Quote :

"simply that the cost per barrel has become so high that it is no longer economically feasible to rely upon it anymore"

are you saying that's true now? I don't think so, dude. we have a long way to go before it's "no longer feasible".

Quote :

"I'm guessing that no matter what we do there's going to be a shift from personal, private long-range transportation (ie cars) to more public transportation."

don't count on it. In fact, i'll say No f'ing way. I'm all for it in certain situations, and existing dense cities can and should make better use of light rail, but the way our cities and suburbs are set up, and the near complete lack of rail outside of big cities, it's just not going to happen. Talk about not economically feasible? Try building a rail system for a city that spans 20 miles in each direction with single family house suburbs for 50 miles.

People aren't going to give up their cars without a fight, and the fight right now is to make cars more environmentally and gas friendly. The discussion we had last week here about plug-in hybrids, for example, can offer an immediate impact on reducing gas consumption, especially for normal commuting driving. Hybrids and plug-in hybrids can offer stop-gap measures to significantly reduce gas usage while more drastic technologies are being developed.

5/3/2007 4:32:59 PM

Quote :

"are you saying that's true now? I don't think so, dude. we have a long way to go before it's "no longer feasible"."

No no, I was saying that, hypothetically, what if we were at this point now? I thought the "hypothetical" part would have been implied in my premise, but I guess I was wrong.

5/3/2007 8:34:37 PM

Quote :

"effects of reduced oil consumption (or perhaps stop it altogether) "

Boo to you! No more street racing? No fun at all.

[Edited on May 3, 2007 at 9:31 PM. Reason : oops, forgot that this wasn't the Garage]

5/3/2007 9:30:38 PM

it wouldn't be as bad of a situation as the govt lets people think. if some of them didn't bleed oil, we'd already be using better fuels anyway.

5/3/2007 10:28:33 PM

Quote :

"I don't think so, dude."

5/3/2007 11:23:36 PM

I think as oil prices rise you will see increased efficiency and alternative forms of energy start to take more of a hold in the market, just like you'd expect. I'm not expecting us to stop using fossil fuels for vehicular transportation, small motors, etc in the next hundred years either. I will say that you'll probably see increased uptake of hybrids and plugin hybrids if the manufacturers can produce vehicles that produce a cost savings (which they still kind of don't), or if gas prices go up another 50% from where they are now (in which case they might start to pay for themselves).

Commuter electric vehicles, increased pedestrian and biking paths, and an increase in (though not necessarily a significant one) train-based commuting and other forms of public transportation will probably happen. People will still drive obscenely expensive gas guzzling vehicles to work each day and a lot of people will still drive mid-sized sedans. We'll just use our energy smarter and some people will be priced out of the market for gas burning vehicles and find an alternative solution.

I would guess food production would try to become more local, though it'll still use a lot of petroleum products. Food prices would go up, but other solutions could be made available. Perhaps an increased usage of high-efficiency trains for moving agricultural goods and a reduction in use of personal vehicles or tractor trailers for long hauls. Farms could also become more corporate and increase production scale to the point where they can afford to operate even with high energy prices, and distribution would be handled with bulk shipments across rail lines to freight depots throughout the country. *shrug* We would definitely be willing to double the amount we'd have to spend to eat to live in this country. We're wealthy. I imagine grocery stores wouldn't collapse as a result of higher food prices, but people would certainly complain as prices rise over the next several decades. Grocery stores will continue to maintain their margin and nothing super-shocking should happen that will make it impossible for them to continue to operate profitably. Food can be more expensive but people still have to eat.

I think recycling plastic as-is isn't economical, and I'm not sure that it would make sense for us to want to recycle plastic in an oil shortage. I thought it was one of those "get less out than you put in" sorts of things, and it's more or less a feel-good thing to recycle plastic as you're reducing the amount of waste you end up burying in the ground (waste that won't decompose for a number of years). We don't have to use less plastic, we have to use different, more expensive plastic. Plastic can be formed from other organically grown materials too. Once the demand for plastic is high enough and oil prices are high enough, it will make sense for the industry to pick up alternative methods of production for plastics.

I see a lot more people riding bikes these days, and more people looking for efficient cars. I'm interested in a more efficient car myself (I really want a wagon, which has all the utility my current car has and probably double the fuel mileage based upon the models I'm looking at). I want to build a house that, in the absolute worst case situation, would be able to operate independently from the grid for at least portions of the day or handle extended power outages during the worst winters and summers. This is kind of an experiment my brother is working on, and my house is going to end up being a project for the design-build company he's working on. We're basically going to try to push green housing at an affordable price, pushing smarter houses onto buyers that suit their needs and don't have to have 2400 sq ft to do it. This is just another market trend you will see continue into the future, assuming energy security doesn't increase and prices deflate to ~1999 levels (because shoot, I'd give up looking for another car at fuel prices like that).

The market will definitely adapt to increased energy prices. I figure people will end up having to consume less and pay more. People don't like that, but a lot of people (a ridiculous shit ton of people) are living beyond their means these days. Consumers will become a bit smarter about energy usage, and companies will be more successful pushing energy efficient products (cars, AC units, houses) on consumers because it will make economic sense for consumers to buy those products. I figure there will be a few shocks to the energy market that cause some recessions in the future, but these will prompt private and public intervention that should provide us with better ways of using the energy we can produce with what we have.

So yeah, in a nutshell: People will realize they don't need huge houses; people will still spend all of their money to live but they'll be doing it using less energy due to market prices; essential goods like medical plastics and food will still be available but using different methods with likely increased prices; market diversity for energy sources might produce increased stability for energy sources and keep politics from being able to cause energy prices to jump ten percent overnight.

[/rant]

5/4/2007 2:19:03 AM

wow, that post was such a mind storm

5/4/2007 2:20:08 AM

Why thank you, I consider myself to be an armchair specialist in many fields.

5/4/2007 2:25:29 AM

As the price for anything goes up its least competitive uses decline first. The relative cost fraction also matters. For your average loaf of bread, transportation fuel constitutes less than 1% of the shelf price. This was demonstrated over the past four years where the price of oil shot up 400% but food prices have only gone up 5%.

Finally, as nearly everything you have mentioned is urgent, such as food safety and food production and distribution, it does not make sense to proclaim prices could reach a point where we gave them up. To use the last five years as a guide, deriving a fixed 1.68% proportion, if the price of a barrel of oil shot up 8000% to $1200 a barrel (from 2001, a gallon of gasoline would cost over $58) the price of a loaf of bread would go from $0.99 to $2.33; not exactly unaffordable, and that is assuming no substitutions are made (shipping more by train or ship). This also beggars the theory that plastics that provide food and health safety would be abandoned: each individual use would still cost next to nothing (plastic grocery bags would still be cheaper than paper bags).

No, food and health are easily competitive uses of oil even at such fictional prices. But as prices rise, uncompetitive uses will be abandoned, reducing consumption and restoring normalcy. Examples abound; currently a sizeable percentage of the world's oil is used to fly air-freight around the world, some of which is perishable foods, but quite a bit of which consists of durable electronics such as flat-screen TVs. Such behavior is rediculously costly and it is hardly a burden for Americans to wait an extra two weeks for the latest flat-screen TVs to come by container ship, consuming 1/1000th the fuel and thus at 1/1000th the cost.

And half the motor fuel used for ground transportation is used by the nation's trucking industry, much of which is moving durable goods which, with de-regulation, could be shifted to rail and container-ships, consuming 1/100th the fuel at the expense of consuming more human effort. And as uncompetitive uses decline it reduces or even eliminates the cost pressure on competitive uses.

This is all irrelevant anyway, as we can have all the oil we wish to put forth the effort to make, since oil can come from almost anywhere with the right application of human knowhow and effort. The barrel price at which non-standard oil becomes competitive is only a guestimation, but it can be descriptive:
$4 - production of light-sweet crude oil from Saudi Arabia
$12 - production of heavy-sour crude oil from Venezuela
$40 - oil from tar-sands as found in Canada and South America becomes competitive
$55 - Ethanol from corn and biodiesel become competitive substitutes
$60 - thermodepolymerization enables the conversion of biological waste into oil
$70 - the large-scale refining of coal into oil becomes viable
$90 - producing oil from sea-shale becomes competitive
$120 - the refining of lumber into oil becomes viable

These prices are not fixed, and are definitely not universal. If coal becomes cheaper than turning it into oil becomes cheaper; if the cost of electricity goes up then all these methods becomes more expensive. Similarly, new technology could dramatically reduce the cost of any of these options. Nevertheless, production is limited by various factors; for example, there is only so much biological waste available for thermodepolymerization, limiting production to the available inputs.

And always remember, we could have all the oil we could dream of today; all it would require is getting technologically advanced oil companies legal access to tap the reserves of various locked up reserves such as in Mexico, Saudi Arabia, Iraq, Liberia, China, or Russia. All these countries have state-run oil sectors which, like anything state-run, are very bad at what they do, which is to provide oil for customers. If Mexico deregulated its oil sector then within five years OPEC would fall apart and the price of a barrel of crude would be under $20. Regretfully, Mexican citizens think of themselves less as a oil consumers than as recipients of government largess.

[Edited on May 4, 2007 at 2:51 AM. Reason : .,.]

5/4/2007 2:36:57 AM